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I would like to create a webservice using Salesforce. Can i do it with free Developer Edition (it will be only for my personal usage, but I might make a profits by using my webservice).

Or I have to buy a Platform Starter License. But wondering if it's provides neccessary for me APEX coding with API callouts.

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From a technical perspective, you can call your webservice API in a Developer Edition org just fine either way. You would need to read the Force.com Sites Terms of Use (and Order Form Addendum) and Site.com Terms of Use (and Order Form Addendum) to see if your use case may be a legal violation or not (and I am not a lawyer, so if you're unclear, make sure you consult one). Note that a Developer Edition org has a pretty severe API limitation compared to a production org, so it may not be suitable for your needs.

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